Simple Interest
How much simple interest does $2,000 earn in 7 months at an interest rate of 2%? Round to the nearest cent.
$23.33
Alison invests $2,300 in an account that pays 6% annual interest, compounded semi-annually. What is the ending balance at the end of 3 years?
$2,746.32
Which of the following is NOT an officially recognized tax filing status by the IRS?
a) Married Filing Separately
b) Single
c) Head of Household
d) Divorced
D
Jackson is 40 years old and plans to retire in 25 years. He has opened an IRA with an APR of 1.75%, compounded monthly. He is making monthly payments of $600 to the account. How much will Jackson have in the account when he is ready to retire?
$225,601.41
The maximum taxable income for Social Security in 2016 was $118,500 and the tax rate was 6.2%. What is the maximum Social Security tax anyone could have paid that year?
$7,347
Mitchell deposits $1,200 in an account that pays 1.5% simple interest. He keeps the money in the account for 3 years. What is the simple interest earned?
$54
Stacy invested $2,000 in an account with 1.75% interest, compounded monthly. What is the ending balance at the end of 2 years?
$2071.19
What is the main reason for claiming dependents on your Form 1040?
a) To increase your refund by qualifying for additional credits
b) To report income earned by your dependents
c) To determine your filing deadline
d) To report the total amount of taxes paid
A
Sara is 30 years old. She is planning to retire at 65 years old. She has opened an IRA with an APR of 1.55% compounded monthly. If she is making monthly payments of $600 to the account, how much will she have in the account when she is ready to retire?
$274,778.27
In 1982, a worker needed to earn $310 to receive one Social Security credit. Sam earned $20 per week that year. How many Social Security credits did she earn in 1982?
3 credits
Anna deposits $2780 in an account that pays a rate of 3.2%. She keeps the money in the simple interest account for 10 years. How much is in the account after the 10 years?
$3669.6
Chris deposits $300 into his savings account. The account pays 1.38% annual interest, compounded daily. What is the ending balance at the end of 2 years?
$308.40
What is the primary distinction between tax evasion and tax avoidance?
a) Tax avoidance involves illegal methods, while tax evasion follows legal rules
b) Tax evasion involves deliberately breaking the law, while tax avoidance follows legal methods to minimize taxes
c) Both tax evasion and tax avoidance are illegal tactics to reduce tax liability
d) Tax avoidance and tax evasion are both strategies that only apply to corporations
B
Olivia opened a retirement account with an annual interest rate of 2.8%. She is planning on retiring in 18 years. How much must Olivia deposit into the account each year to reach a total of $500,000 by the time she retires?
$ 21,742.42
In 2016, Mario had two jobs. He earned $76,500 at his office job. He had a second job where he earned 60,600. How much Social Security did he overpay?
2016 Maximum Taxes Paid: $7,347
$1,153.20
How much principal must be deposited in a 3-year simple interest account that pays 2.55 % interest to earn $600 in interest?
$7,843.14
Sara deposits $5,000 in her savings account with an interest rate of 1.5%, compounded weekly. What is her ending balance at the end of 3 years?
$5230.11
Which of the following is NOT generally classified as a tax deduction?
a) Student loan interest
b) Medical expenses
c) Lottery winnings
d) Charitable contributions
C
Carlos is 32 years old and plans to open an IRA. He wants to have $750,000 in the account when he retires at age 65. The account has an APR of 1.9%, compounded monthly. How much must Carlos deposit each month to reach his goal of $750,000?
$1,363.28
Liane turned 62 in 2016. Find her full retirement benefit if her average month salary over 35 highest paying was $3,100. Be sure to round.
1) 90% of the first $856 in monthly earnings
2) 32% of monthly earning between $856 and $5,157
3) 15% of earnings over $5,157
$1,488.48
Alex deposited $700 into a 4.5-year simple interest account. He wants to earn $80 interest. What interest rate must the account pay?
2.5 %
How much more does $2000 earn in 10 years compounded daily at 4% than $2000 in 10 years compounded semi annually at 4%, to the nearest cent?
$11.69
How do tax credits differ from tax deductions?
a) Tax credits directly reduce the amount of taxable income, while tax deductions reduce the amount of tax owed.
b) Tax credits reduce the amount of tax owed, while tax deductions reduce taxable income.
c) Tax credits only apply to certain types of income, while tax deductions apply to all income.
d) Tax credits are only available to corporations, while tax deductions are available to individuals.
B
Emily has been contributing $600 each month to a retirement account that earns 2.1% interest, compounded monthly, with pre-tax dollars. After 12 years, she needed to cover some unexpected expenses and decided to withdraw 20% of the balance in the account. Rounded to the nearest dollar, how much did she withdraw?
$19,632.87
Jorge turned 62 in 2020. His average monthly salary over his 35 highest-earning years was $4,200. What is his full retirement benefit?
1) 90% of the first $960 in monthly earnings
2) 32% of monthly earning between $960 and $5,785
3) 15% of earnings over $5,785
$1,901